Your OKR Cascade is Breaking Your Strategy

The Fragmentation Problem

Cascading OKRs in this way carries some risks. They guarantee you’ll ship your org chart, with your execution strictly arranged the same way your company is. This can be fine if your organization is well-designed and goals fit neatly into org chart boundaries.

But most orgs aren’t well designed. Marketing is over here, product over there, and sales in a third branch. Product management and engineering might have two different reporting structures. Most strategies and objectives should require cross-functional teams—you want objectives that bring together all necessary departments. Cascades tend to fragment strategy.

Imagine a marching band where each section sets goals independently. The percussion section decides to prioritize dramatic crescendos, the horns focus on crisp staccato passages, and the woodwinds emphasize melodic flow. What if it wasn’t just different goals for volume and tempo, but for when to start marching and when to arrive at certain waypoints? The result would be chaos: musicians arriving at different times, playing at conflicting volumes, and creating a cacophonous mess instead of a coordinated performance. This is exactly what happens when departments cascade objectives without considering how their work must harmonize with others.

Product management creates product goals to advance the company objectives. Because engineering is in a different part of the organization, they have a different set of goals coming from their leadership, so they write a completely different set of OKRs than Product created. So what gets shipped? Usually, it’s a little of each, with both Product Management and Engineering missing a bunch of their OKRs.

The Marginalization Effect

Second, teams working on things that are not strategic are marginalized. What objectives do the sustain engineering team have for maintaining an EOL product? What do business support functions like Finance and Legal do to advance your company strategy? These teams often struggle to create meaningful OKRs that connect to company strategy, leading them to either stretch the truth about their strategic relevance or accept that their work doesn’t "count" in the OKR framework.

This creates a two-tier system where some teams are seen as strategic contributors while others are relegated to operational afterthoughts.

Not all teams should be expected to cascade their goals up to a larger corporate goal. Allow supporting teams to have goals that drive how they’ll better support the rest of the company and set it up for success.

But beware of teams becoming lazy and declaring themselves outside the strategic cascade simply because it’s easier to go their own way than to contribute to the strategy.

So what can you do instead? Here are two approaches that address these cascade problems, each with trade-offs.

Alternative Approaches

Top-Down Assignment

To solve the problem of creating OKRs to do what we already planned, one option is for the department to assign the objectives. Instead of asking each team to create objectives, the leaders ensure cross-team alignment by writing their goals for them. Pushing the strategy down will result in less fragmentation than allowing it to form bottom-up, but it comes at a cost of team autonomy.

This method of pushing objectives down can solve the alignment problem, but doesn’t address effectiveness or knowledge problems. When the approach to a goal doesn’t work, the team will keep pushing forward to meet the goal they were given. If a team learns new things, they’re unable to adjust their plans based on their new knowledge. Top-down goal assignment tends to create rigidity. It can create clarity, but adds bureaucracy as decision-making centralizes.

If you already have centralized decision-making, then this might be OK. Organizations that don’t already have autonomy may benefit from taking baby steps. In this situation, you’re not adding new bureaucracy—you’re pushing freedom down. You’re still telling teams what they should accomplish, but they’re deciding how to do it and how to measure how it was done. If that’s more freedom than they’ve had before, this can work.

But if you have high-agency teams and are finding that OKR cascades are causing fragmented strategies, you’ll want to try something else.

Shared Objectives Across Functions

If you’re shipping the org chart, then change the org chart. You don’t need to reorganize the company, but you can change how you group your OKRs. Is marketing pushing one OKR and Product another? Have them deliver the same OKR. Make them jointly responsible for an objective, instead of independently deciding how they’ll each contribute to strategy.

Cascade your OKRs down the virtual org chart instead of the actual org chart. This will require coordination and agreement between different leaders. They’ll need to agree on not just the objective, but who the objective applies to. This isn’t a trivial amount of work, but the results will be worth it.

This also doesn’t work if you’re using goals or OKRs to measure team or individual performance. There are lots of reasons why you shouldn’t do this, but if you are, then organizing your OKRs by virtual org chart won’t work. You won’t be able to attribute success or failure to the people or the team.

All these problems can be avoided, but you must do it intentionally. The solutions require rethinking both how objectives flow through your organization and how teams interact around shared goals. They require you to distribute goals based on how the work gets done, not by who reports to whom.

Putting It All Together

OKR cascades work well for hierarchical company structures that can isolate departmental goals. They fail for the cross-functional, collaborative work that drives most meaningful business outcomes. Instead of fighting this reality, design your OKR process around it. Create shared objectives that require collaboration, assign ownership that crosses organizational boundaries, and regularly check whether your goals are actually advancing strategy or just perpetuating the status quo.

If your OKRs perfectly map to your org chart, you’re probably missing the most important opportunities for impact.